(Yicai Global) Nov. 10 -- The Shanghai Stock Exchange will broaden its stock connect program, which currently links the bourse with those in Hong Kong, London, Zurich and Frankfurt, to include other major stock exchanges around the world, the chairman of the Shanghai bourse said yesterday.

The Shanghai bourse will strengthen cooperation with other stock exchanges in order to attract strongly performing overseas companies to issue Chinese depositary receipts in Shanghai, Qiu Yong said at the Shanghai Stock Exchange Global Investors Conference 2022.

The Shanghai stock exchange will continue to improve its global capital allocation so as to become more attractive and competitive on the global stage and boost the confidence of Chinese and overseas investors, said Qiu, who has only been in the post for just over two weeks and was previously director of the organization department at the China Securities Regulatory Commission.

China extended its stock connect mechanism, already at play in Hong Kong and London, to include Germany and Switzerland in February. It allows companies listed on the mainland to issue global depositary receipts on the other country’s bourses and vice versa. So far eight firms that have gone public in Shanghai have issued global depositary receipts on the London bourse and the Six Swiss.

Since regulators started to allow overseas institutional investors to trade bonds on the Shanghai stock exchange in June, foreign firms have issued over CNY100 billion (USD13.8 billion) worth of Belt and Road bonds, which are used to finance projects related to the Belt and Road initiative, and Panda bonds, which are Chinese yuan-denominated bonds sold by a non-Chinese issuer on the mainland, Qiu said.

The Shanghai stock exchange has also been increasing the variety of cross-border funds on offer. It has 47 cross-border exchange traded funds totaling more than CNY120 billion (USD16.5 billion) that invest in countries and regions including Hong Kong, the US, Germany, France, and Japan. The China-Japan ETF Connect and Shanghai-Hong Kong ETF Connect continue to run smoothly.

Editor: Kim Taylor